A Cook County judge ruled earlier this month that the city’s efforts to impose new taxes on various tobacco products violated a 1993 state law.
In a Jan. 20 ruling, Judge Ann Collins-Dole found that the city violated a 1993 law when it tried to impose taxes on cigars and smoking, smokeless and pipe tobacco last year.
That amendment to state law declared municipalities could not impose “a tax based on the number of units of cigarettes or tobacco products.”
It stipulates, though, that “a home rule municipality that has not imposed a tax based on the number of units of cigarettes or tobacco products before July 1, 1993, shall not impose such a tax after that date.”
A lawsuit challenging the legality of the taxes was filed last May by Iwan Ries — the self-proclaimed oldest tobacco shop in the city — and several trade and tobacco sales groups.
The new taxes passed by the City Council included $1.80 per ounce of smoking tobacco; 60 cents per ounce of pipe tobacco; 20 cents per little cigar; and 20 cents per large cigar, according to the city.
The city hoped the new taxes would bring in $6 million a year, which would go toward funding a one-week summer transition program for all incoming high school freshmen and two weeks of summer school for eighth-graders identified as dropout risks.
Attorneys for the city could still appeal the ruling.
In an emailed statement Tuesday night, Chicago Law Department spokesman Bill McCaffrey said that, while the judge’s decision was disappointing, the city has still made progress in its fight against youth tobacco use.
“We are disappointed in the judge’s decision and are currently evaluating our legal options,” he said. “This ruling does not change the fact that tobacco users now need to be 21 years of age to purchase tobacco in Chicago, which furthers health protections for our youth, nor does it impact the other important steps the administration has taken in recent years to discourage the use of dangerous tobacco products.”
The phrasing of the law — specifically “cigarettes or tobacco products” — was at the crux of the plaintiffs’ argument.
Stanley Kaminski, an attorney for Iwan Ries and the other plaintiffs, said Tuesday evening that the city tried to use its cigarette tax, passed prior to 1993, as a way to grandfather in new taxes on other tobacco products, which were not in place before 1993.
“The city’s position was that ‘or’ didn’t mean ‘or,’ ” Kaminski said. “If [lawmakers] meant a cigarette and tobacco products tax, they wouldn’t have said ‘such a tax.’ ”
The judge agreed.
“Strictly construed, ‘tobacco products’ do not include cigarettes when preceded by ‘cigarettes or,’ ” Collins-Dole wrote. “The City claims the plain language of Section 6a(2) should be read as grandfathering in all tobacco taxes, not just taxes on cigarettes,” Collins-Dole wrote.
“However, the plain meaning of ‘such a tax’ is singular because it modifies both ‘a’ cigarette and ‘a’ tobacco tax, separately,” she added.
In her ruling, Collins-Dole also discounted the city’s argument that the taxes were warranted because of how harmful tobacco products can be on a person’s health.
“The City further argues that as a matter of public policy, the tax is justified given the danger of tobacco products causing serious and debilitating diseases,” she wrote. “The court finds this argument unpersuasive.”
There have been prior attempts to change the wording of the law, Collins-Dole wrote, most notably in 2011, when Ald. Ed Burke (14th) introduced a resolution to the City Council that urged the Illinois General Assembly to amend the law to allow municipalities “to tax any and all tobacco products.” The resolution failed to pass.
“This resolution shows the City’s awareness of the distinction between a tax on cigarettes and a tax on other tobacco products,” Collins-Dole wrote.